Mortgage rates drop below 5 percent

New York, NY, United States (AHN) – Mortgage rates dipped slightly this week, with the average rate on the benchmark conforming 30-year fixed mortgage rate receding to 4.96 percent, according to Bankrate.com’s weekly national survey.

The average 15-year fixed mortgage retreated to 4.29 percent, while the larger jumbo 30-year fixed rate climbed a bit to 5.59 percent. Adjustable rate mortgages were broadly lower, with the average 5-year ARM falling to 3.92 percent and the average 7-year ARM slipping to 4.35 percent.

Following a dramatic rise over the past six weeks, mortgage rates retreated over the last few days, falling below the 5 percent threshold. Mortgage rates are closely linked to yields on long-term government bonds and thereby the bonds were an appetizing acquisition by the Federal Reserve.

The rates are slated to bounce back and forth over the 5 percent mark in the early part of next year, but continued economic improvement will see mortgage rates trending higher as the year unfolds.

The last time mortgage rates were above 6 percent was November 2008. At that time, the average rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.96 percent, the monthly payment for the same size loan would be $1,068.76, a savings of $173 per month for a homeowner refinancing now.

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